Dominion Works To Stimulate Competition; Pilot Programs Would Be More Attractive To Suppliers

April 5, 2004

RICHMOND, Va. - Dominion Virginia Power is proposing two significant revisions to its retail access pilot programs to encourage further development of a competitive electricity supply market in Virginia.

First, the company asked the Virginia State Corporation Commission to eliminate the competitive transition charges, or wires charges, for pilot participants. Second, Dominion asked the Federal Energy Regulatory Commission to approve a new backup supply service for competitive retail suppliers that would ensure their ability to serve their customers.

Taken together, the proposals should remove two barriers that competitive suppliers have told the company block their ability to participate in the pilot programs.

"Dominion is committed to helping make competition work in Virginia. One of the main goals of the pilots is helping determine the best methods for fostering customer choice," said Thomas F. Farrell II, president and chief operating officer. "The proposed changes are designed to help make Virginia more attractive to competitive suppliers. If these pilots are successful, we will have created a firm foundation for the development of retail electric markets."

The competitive transition charge set annually by the SCC is designed to help utilities recover past costs. The company proposed and the SCC approved last September a 50 percent reduction in the charge for pilot participants. But competitive suppliers said further reductions were needed because market prices for electricity had risen significantly in recent months. Eliminating the competitive transition charge for pilot customers should provide the opportunity for attractive offers to be made to customers.

In its FERC filing, Dominion said delays in integrating the company with its chosen regional transmission organization, PJM Interconnection LLC, had made it difficult for competitive suppliers to acquire transmission service to get their electricity to Virginia. Under the proposal, Dominion would provide backup energy when necessary, for a limited time, to allow the competitive supplier to continue serving its pilot customers. This interim backup service would end once Dominion integrates its transmission system into PJM.

For participants in the company's pilot programs, approval of these proposals would mean competitive suppliers would have a better opportunity to develop attractive price offers for potential customers. Dominion expects the program to provide valuable experience for customers, suppliers, utilities and regulators as Virginia develops a competitive electricity marketplace.

Regardless of which company supplies the power, Dominion Virginia Power, will continue to deliver electricity to customers and maintain the company' wires, poles and equipment. Any time during the pilot program, customers can return to Dominion for electricity supply service at their current rate, which is capped until Dec. 31, 2010.

Dominion is one of the nation's largest producers of energy with an energy portfolio of more than 24,000 megawatts of generation. Dominion also serves 5.3 million retail energy customers in nine states. For more information about Dominion, visit the company's Web site at www.dom.com.

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